Report 2013-036 Recommendation 8 Responses

Report 2013-036: Indian Gaming Special Distribution Fund: Counties' Benefit Committees Did Not Always Comply With State Laws for Distribution Fund Grants (Release Date: March 2014)

Recommendation #8 To: Lake County

To ensure that grant recipients comply with state law concerning interest earned on mitigation grant funds, by June 2014, the Lake County benefit committee should establish policies and procedures to verify that grant recipients have placed grant awards in interest-bearing accounts, and that the interest is spent only on activities that mitigate the effect of tribal gaming on local jurisdictions.

1-Year Agency Response

During the SDF Committee meeting held on March 10, 2015, the committee adopted the amendment to "Statement of Assurances, Certifications and Hold Harmless" to address procedure to verify that grant recipients put funds in an interest-bearing account and that interest earned on unspent funds are spent on the approved. Per Richard Powers request, I am sending unapproved committee minutes from said meeting. We have not held a meeting to "approve"

6-Month Agency Response

Training was provided to Committee members and applicable agencies regarding the audit findings related to interest earned on mitigation funds. Additional information was added to the application guidelines and application forms requiring this information. This year in preparation of the annual report, agencies not supplying adequate information were contacted until the information was provided. The County identified interest accrued on previous years grants and the annual report was updated to include this information and accurately reflect the total funds to be appropriated for applicable projects.

While this was listed as "fully implemented" the same process will need to be followed each year that money remains unspent on projects.

Completion Date: October 2014

Response Date: December 2014

California State Auditor's Assessment of 6-Month Status:
Pending

Lake County did not provide documentation that it has established policies and procedures to verify that grant recipients are complying with state law regarding interest earned on mitigation grant funds.

Auditee did not substantiate its claim of full implementation

60-Day Agency Response

Staff have revised the Notice of Funding Availability (NOFA) that is sent to applicants and notifies each agency that upon approval of funding by the committee they will be required to submit verification that an interest bearing account exists in which they will deposit Indian gaming funds. Additionally, as part of the submital process for the annual report, staff will require verification that the funds were deposited into said interest bearing account and to provide verification of the amount of interest accrued on any grants. The committee will verify that grants and any subsequent interest will be spent to mitigate the effect of Indian gaming through the annual report process.